Amazon is sending out refunds to customers as part of a billion-dollar settlement over what regulators dubbed "deceptive enrollment and cancellation practices" on its Prime service. Under the terms of its 2025 agreement with the Federal Trade Commission (FTC), Amazon is paying $1 billion in civil penalties as well as $1.5 billion in refunds to customers. The company has denied any wrongdoing, and said in a statement last year that "Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers." Last month, the FTC said that the refunds would be expanded to more consumers and that the maximum payout had increased to $200 from $51.
By September, the FTC said over $845 million had been refunded, with future payments being "distributed automatically, eliminating the need for consumers to submit claims or additional paperwork to Amazon." The company began issuing the automatic payments on Thursday to those who became eligible under the new order. Following a threshold review in February 2027, the final round of pro rata payments will begin by April 2027. Newsweek has contacted Amazon for comment and is awaiting a response.
The settlement stems from a 2023 lawsuit filed by the FTC, alleging that Amazon enrolled millions onto Prime subscriptions without their consent and then made it difficult to end these—what the agency referred to as "sophisticated subscription traps." Last month, a court approved a motion from the FTC and Amazon, which the former said would "accelerate and expand future redress payments to consumers." "All future payments will be distributed automatically, eliminating the need for consumers to submit claims or additional paperwork to Amazon," the FTC said. "The revised order will ensure more consumers who were harmed by Amazon’s deceptive enrollment and cancellation practices benefit from the FTC’s historic settlement," said the FTC’s Bureau of Consumer Protection Director Christopher Mufarrige. Under the landmark $2.5 billion settlement struck last September, the FTC said American Prime customers would be entitled to refunds if they subscribed unknowingly through a "challenged enrollment flow," or were unable to cancel their membership between June 23, 2019 and June 23, 2025.
The original order only required Amazon to reimburse customers who used 10 Prime benefits or fewer during the relevant time period. Under the new order, however, customers who used up to 20 Prime benefits are now eligible, with the maximum payment raised to $200. If the total redress paid by Amazon does not meet a threshold of $1 billion, the order states that Amazon will begin automatically issuing up to $149 to eligible customers.
The FTC said that "millions of additional consumers" used between 11 and 20 benefits and are therefore now eligible for the automatic refunds. "The payments will be made via electronic payment (Venmo or PayPal) or mailed check without requiring consumers to submit claims, respond to notices or complete any forms," it said. Some Reddit users say they have received emails telling them that they meet the criteria for a refund, and have encouraged those awaiting a notice to check their junk folders.
The FTC has encouraged consumers to go to its designated Amazon refund page for further information. Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.
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